Economists Unite in a Project for the Government

After a year of discussions, meetings, and messages by the WhatsApp, over one hundred economists of different trends gathered in a group called “Economists of Brazil“ decided to present a project to try to get the country out of the worst fiscal crisis and put the economy on the sustainable growth.

Today, in a debate that will take place at the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV), in Rio, will be presented to the academic environment the ‘Charter Brazil’, a set of economic guidelines formulated by this group and addressed to the next government.

The purpose of the group is to send the proposal to PauloGuedes, future Minister of Economy of President-elect JairBolsonaro.

“This is not a document of consensus, but of convergence,“ says economist CláudioFrischtak, a member of the group and one of the rapporteurs of the letter.

The document is signed by over a hundred economists, among them Bernard Appy, Ana Carla Abrao, Samuel Pessoa, AlexandreSchwartsman, JoséMárcioCamargo, Octavio deBarros, Silvia Matos, and Elena Landau.

The starting point of the 91-page document is the reform of the State to give sustainability to public accounts. To achieve this goal, the letter points out 13 guidelines that should underpin the policies of the new government. These guidelines address recurring issues, such as the need for pension reform and the simplification of the tax system.

They also raise issues that have recently been the subject of controversy with the elected government, such as transforming Mercosur into a free trade area or guaranteeing sustainability policies for the environment, such as zero deforestation.

Recession

Frischtak highlights three key points that must be solved to put the economy on the track. The first is the social security issue. “Without doing pension reform and resolving the tax issue, unfortunately, we will slip into a new recession,“ he warns. After the elections, the reason for the mini euphoria with the elected government is that people believe the tax issue will be resolved, he notes.

The second important point cited by Frischtak is the low productivity of the economy. Improving the business environment, public safety, education, tax issue, and infrastructure is the passport to increase productivity. “We will not be able to resume growth on a sustainable basis with the level of productivity we have today.“

The last point cited by him is the environmental question of sustainability. “We can not throw away the environmental assets we have; for us, in the first place, and also for the world. “

In the economist’s accounts, if much of the reform guidelines contained in this letter were followed, the country could grow again at a rate of 3.5 to 4 percent a year. “The reforms will lead to a resumption of investments and productivity gains, and this combination accelerates growth.“